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Wave of the future?

May 25, 2011 — It’s the economic-policy equivalent of the tree falling in the forest: Around the country, dozens of small and medium-sized communities have begun to build high-speed Internet systems, with some remarkable early results. Outside the affected communities themselves, however, hardly any national leaders are looking at these experiments, or at the idea that broadband, like highways and electricity, might be one of those forms of crucial economic infrastructure where public investment has the potential to spark a surge of private investment, creating jobs and boosting wages and opportunity.

Job openings in Virginia and North Carolina

Rick Boucher represented the southwestern corner of Virginia in Congress from 1983 through 2010. In Boucher’s former district, the roughly 18,000 inhabitants of Bristol, Virginia, were among the first Americans to have fiber-to-the-home (or FTTH) Internet access. The city’s publicly owned electrical utility, BVU, funded the project with bonds, completing its initial deployment in 2002; more recently, federal grants have allowed the utility to extend service to businesses — but not homes — in nine nearby counties.

There was skepticism about the publicly owned utility’s broadband initiative at first, former Congressman Boucher said. “But I think today there’s no doubt at all that it’s been a worthwhile investment.”

There was skepticism about the BVU initiative at first, Boucher said in a phone interview. “But I think today there’s no doubt at all that it’s been a worthwhile investment,” he added.

As evidence of the economic payoff, Boucher points to the construction of large facilities by Northrup Grumman, which manufactures military hardware, and CGI, a global computer-consulting firm. Both companies cited the BVU network as an important lure. Together, they are bringing more than 700 jobs to the region, paying an average annual wage of over $50,000, “which is a phenomenal salary for our part of the world down here,” according to Wes Rosenbalm, BVU’s president.

Fiber has helped Bristol and the surrounding counties hold onto existing businesses as well as attract new ones. Alpha Natural Resources, a coal giant, pointed to the BVU service as a key factor in its 2009 decision to keep the company’s corporate headquarters in Bristol after a merger with Foundation Coal, a rival based in the more cosmopolitan Baltimore-Washington corridor. BVU’s fast service (up to 30 megabits for downloads and 10 megabits for uploads) will allow Alpha management to maintain close electronic watch over a combined network of mines in West Virginia, Kentucky, Pennsylvania and Wyoming.

Over the hills to the south, a number of North Carolina towns and local cooperatives have built broadband networks, using foundation grants, a now-depleted state subsidy program, and, in a few cases, federal stimulus money. Thanks to the combination of rural broadband and an online produce exchange set up by a nonprofit group called Foothills Connect, some of the former employees of North Carolina’s many shuttered textile and furniture plants have built new livelihoods using formerly idle or under-exploited family farmland to grow such things as purple garlic, squash blossoms and shitake mushrooms for the high-end restaurants of Charlotte.

The Chattanooga story

As the U.S. struggles to revive a badly depressed economy, hardly any elected leaders or opinion leaders on the national stage are talking about publicly-owned or operated broadband.

If the economic policy committees of Congress decided to investigate the economic potential of community broadband, they could get a good quick picture with a three-day bus tour. Day One: southwestern, Virginia. Day two: central North Carolina. Day three: Chattanooga, Tennessee, which, with a population of 168,000, is the biggest of the roughly 55 U.S. communities in which locally owned electrical utilities have decided to lay fiber-optic cable in the name of economic development.

Chattanooga is another place where fiber has played a part in convincing big companies to locate large facilities. J. Edward Marston, vice president of marketing and communications for the Chattanooga Chamber of Commerce, points to two recent recruiting triumphs. One involved a $91 million Amazon distribution facility; the other, an operations center for a British-owned company, Homeserve, that provides seven-day-a-week appliance repair and maintenance for customers in 36 states.

Chattanooga’s fiber network has been a foundation for high-tech business startups. One new company, Specialty Networks, allows doctors spread across many area hospitals and offices to get quick image analysis from radiologists specializing in the cancers of various regions of the body. In the past, according to Dr. Jim Busch, the radiologist behind the venture, eye, nose, and throat doctors would get initial readings from radiologists who did not necessary understand the particular subtleties of cancers affecting those areas. Now a single head-and-neck expert reads the images for just about all of greater Chattanooga’s ENT doctors. “The relatively inexpensive nature of all this bandwidth has been great for patient care,” Dr. Busch told Remapping Debate.